For Sale By Owner (FSBO) Guide

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What You Should Know

  • The FSBO method is best if you already have a buyer.
  • It saves you the cost of a listing agent, but there are potentially additional legal and marketing costs.
  • Buying agents try to avoid working with FSBO listings.
  • You will need to value your home, promote it, then negotiate and finalize the deal.
  • There are discount brokerages that will do this for you cheaply.

For Sale by Owner Explained


Selling a home for sale by owner means you're not using a real estate agent. People do use this method to avoid paying real estate commissions in Canada. Sellers must pay for both the buying and selling agents, with most of the money going to the selling agent. You can save around 2.5% of the transaction value or $20,000 for an $800,000 home by cutting out the selling agent.

However, marketing, staging, and increased legal fees eat into the savings. Additionally, you'll end up doing everything yourself, from finding a buyer to negotiating the price and handling the closing. This guide will help you understand if FSBO is right for you and the steps to sell your home FSBO if you choose this path.

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  • Save money on the real estate agent commission
  • You understand your home the best
  • No pressure to sell from a real estate agent
  • Buying agents are less likely to work with you
  • Potentially make costly legal mistakes
  • Lots of work for you
  • May need to pay marketing costs and additional legal costs

The Actual Savings from FSBO (Example)

Let’s assume you choose to sell your $800,000 home FSBO to avoid using a listing agent. Although at first glance, it would appear you save the 2.5% commission, or $20,000. However, let’s calculate the additional costs that eat into the savings.

  • Increased legal fees: Most lawyers will charge 20% more for FSBO transactions. If this isn’t the case for you, we recommend paying extra for an experienced lawyer. We expect this to cost an extra $500.
  • Allowance for legal mistakes: Even with an experienced lawyer, your FSBO sale is more likely to end in a lawsuit due to a mistake. If we estimate 10% of FSBO transactions end with a lawsuit settlement of $10,000 this translates to an expected $1,000 cost.
  • Marketing costs: If you already have a buyer, you can ignore this cost. However, the most expensive cost of selling FSBO is attracting buyers. You’ll have to work extra hard to prove the deal is legitimate to suspicious buying agents who don’t like FSBO listings. Also consider the cost of staging your home which the agent would’ve covered. Depending on your marketing strategy, this can range from $0 to $4,000.
  • Valuing your time: If you have a buyer you can also ignore this section. However, consider the time it takes to coordinate open houses, negotiations, and managing interested buyers. If your house is valued at $800,000 we’ll assume your hourly wage is at least $40. Additionally, we predict it takes 50 hours of active management to finalize the deal. This translates to a cost of $2,000.

Overall, if you have a buyer you can expect to save $18,500 by selling FSBO. If you need to spend time and money promoting your home, you can expect to save $12,500 to $16,500. You can use these savings to offer a larger discount and attract more buyers. At the end of the day, you’ll have to deal with the uncertainty and stress of handling the transaction.

Steps to Sell your Home FSBO

Now that you understand what is involved with the FSBO method, you should know if it's right for you. If you choose to pursue this path, there are five steps that you must follow to sell your home FSBO successfully. Note that the most challenging part is finding buyers through promoting your home. Many buying agents are hesitant to work with FSBO sellers and try to have their buyers avoid it. This is why it's best to sell FSBO if you already have an interested buyer.

Skills Required to Sell a Home

The skills required to sell a home in Canada can be broken into three categories: marketing, legal, and sales.

  • Marketing is an essential skill because it attracts potential buyers to your property. It includes listing descriptions and photographs, open houses, and advertising on websites such as Zillow or
  • Legal skills are vital because you'll handle all the paperwork related to the sale. This includes reviewing contracts, preparing offers, and understanding what disclosures need to be made.
  • Sales skills are essential because you'll be negotiating the purchase price and dealing with buyers who may have changed their minds. Being able to close a deal is key to a successful FSBO.
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Step One: Find Specialists to Fill your Knowledge Gaps

When you sell a home FSBO, you are liable for any mistakes that could happen in the deal. For example, if you fail to disclose known damages or don't properly transfer the title, then your buyer could end up suing you. It's essential to understand where you will likely make mistakes and hire specialists to prevent them.

Consider spending more on a real estate lawyer to ensure the transaction happens smoothly. You may also lean on a real estate agent friend to provide some guidance. A good strategy with FSBO is to sell your home as-is. This means the buyer is more responsible for inspecting the property. However, selling as-is tends to cause your home to be priced at a discount.

Step Two: Pricing your Home


Now that you've assembled a board of directors, the next step is to determine the actual value of your home. There are multiple ways to do this, each with challenges. Real estate agents almost always use a comparative market analysis (CMA), but you can also receive an appraisal or use online platforms. This section will go into detail about each method.

  • Comparative Market Analysis: Involves comparing your home with similar, recently sold homes in your neighbourhood. The concept is that if a similar home is sold for a certain amount, then yours should be able to sell too. However, each home is different and requires pricing adjustments. This method also requires lots of sales data to make educated comparisons. Only real estate agents have access to MLS sales data, meaning you'll have to use another platform or have an agent friend help you. To learn more, you can read our article on doing a CMA in Canada.
  • Appraisal: This method involves having a professional home appraiser evaluate your home. Once they've completed their research, they'll provide you with a report that contains their estimate of your home's value. This is considered one of the most accurate methods but can be costly. You can expect to pay a few hundred dollars for an appraisal.
  • Online Platforms: The final method to pricing your home is the least accurate. Many online platforms such as Zillow or our free home value estimator allow homeowners to input their information and receive a home valuation. However, these evaluations are often inaccurate because they use publicly available data that is not always up-to-date. Furthermore, they don't consider the unique features of your home. Nevertheless, using an online platform can be a good starting point for determining the price.

Step Three: Promoting your Home

The next step is to start promoting your home. This can be done in various ways, but the most crucial part is to be consistent. As mentioned earlier, many buying agents are hesitant to work with FSBO sellers and try to have their buyers avoid it. This is why it's best to sell FSBO if you already have an interested buyer. There are a few methods you can use to promote your home:

The Best Season to Sell your Home

If you already have a motivated buyer, the best time to sell your home is right now. However, if you need to find buyers, most people tend to shop for new homes in the spring. This is the typical open house season where many buyers and listings hit the market. This also means your home will have more competition to sell, many with professional advertising.

  • Listing your Home on a Real Estate Website: The most common way to list your home is to do it on a real estate website. This will allow potential buyers to see your listing and contact you if they're interested. You'll need some good pictures and a detailed description to make your listing stand out. There are also services such as For Sale By Owner Inc. that allow you to list your home on MLS for a fee.
  • For Sale Signs: An old but still effective method is to put up a for-sale sign in front of your home. This will let people know that you're selling, and they can contact you if they're interested. You can include your phone number or email address on the sign.
  • Print Media: Another way to promote your home is through print media. This could involve placing an ad in the local paper or online. You'll need to include a lot of information such as price, location, and photos.
  • Social Media: A newer way to promote your home is through social media platforms such as Facebook, Twitter, or Instagram. You can create a profile for your home and include photos, videos, and contact information. This is a great way to target potential buyers who are already interested in real estate.
  • Open Houses: An open house is a great way to show your home to many people at once. You can invite agents and their clients as well as the general public. It's a good idea to have some refreshments and snacks for people to enjoy.
  • Networking: The best way to find potential buyers for your home is through networking. This could involve meeting with friends, family, or acquaintances who know someone interested in purchasing a home. You can also join local real estate groups or clubs to meet potential buyers.

Step Four: Negotiating the Sale


Once you've found a potential buyer, it's time to start negotiating the sale. This can be a complex process, but you can get the best deal for your home with some patience and preparation.

The first step is to come up with a list of potential buyers interested in purchasing your home. This will give you a bargaining chip when it comes time to negotiate. The more potential buyers you have, the more power you have to walk away from bad deals. It's also a good idea to have a backup plan if the first buyer falls through.

It's important to remember that you're not obligated to sell to the first person who makes an offer. You can always negotiate with other buyers until you find the one that's best for you. When negotiating, it's essential to keep in mind what the buyer is looking for. They might be interested in purchasing your home for a higher price if they don't have to do any repairs. On the other hand, they might be willing to pay more if they can move in right away.

It's also important to consider your own needs when negotiating. You might be interested in getting the highest price possible for your home. However, you also need to consider how long it will take to find another buyer if you don't accept the first offer.

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Assessing Conditional Offers

When you receive a real estate offer, it will likely come with conditions. These conditional offers are standard in real estate and require certain events to happen for the transaction to finalize. For example, common conditions include financing and selling their prior home. This means your buyer wants to sell their current home and receive a mortgage before buying your home.

As a seller, you want the least amount of conditions possible because there is less probability of your deal failing. It's essential to consider more than the purchase price of your home. A high purchase price with many conditions may not even happen. If you have many interested buyers, cherry-pick the best deal, which is usually a combination of a higher purchase price with fewer conditions.

Step Five: Closing the Sale

Once you've agreed with the buyer, it's time to close the sale. This process can take a few weeks, but you can make it go as smoothly as possible with some preparation.

The first step is to contact your real estate lawyer and tell them that the sale has been finalized. They will start transferring the title of the property to the buyer. They'll also need to prepare a few documents such as the deed, mortgage agreement, and title. Your lawyer will help you with this and ensure that everything is in order.

The final step is to transfer the money from the buyer to you. This can be done through a wire transfer, check, or cash. Another option is to use an escrow service that holds the money while things finalize. Once the money has been transferred, the sale is complete! Congratulations on selling your home! It's a significant accomplishment, and with a little hard work, you can achieve the best results.

Common FSBO Mistakes

  • Disclosure Failure: This can include mentioning zoning restrictions, property defects, or recent renovations. By not disclosing this information, you're opening yourself up to lawsuits from the buyer after the sale has been finalized.
  • Misrepresentation: Do not lie in your description because you think it will help you find more buyers. For example, stating your home is 2,500 square feet when it's only 2,200 can end in a lawsuit. Your buyer can sue you for misrepresentation even after the deal has been finalized. Consider showing your description and advertisements to your real estate lawyer before marketing.
  • Not Qualifying your Buyer: As mentioned previously, you want a buyer with the highest chance of finalizing a successful deal. Don't waste your time with tours to buyers who can't qualify to buy your home. Ask to see their credit score, proof of down payment, and income range in advance. Ideally, their credit score is above 750, and income is at least 3x your annual property management costs (mortgage payments, property tax, heating and utilities). We have a guide on the required documents to receive a mortgage in Canada which will help you understand what to look for in a buyer.
  • Poor Advertising: If you need to use online advertising to find potential buyers make sure to put your best foot forward. It's essential to have a high-quality description and photos to compete with other listings. You can spend 30-60 minutes on youtube learning these concepts and should be proficient.

The Bottom Line

Selling a home can be complicated, but you can get a good deal for your property with some preparation and patience. We've outlined the five steps to selling your home successfully in this guide. We hope that this information will help you in your journey to finding the perfect buyer for your property.

The calculators and content on this page are provided for general information purposes only. WOWA does not guarantee the accuracy of information shown and is not responsible for any consequences of the use of the calculator.